Panetta Warns Of National Security Threat In Coming Budget Debates

MCLEAN,VA (WUSA) --- The Pentagon is reluctantly preparing for three coming congressional fights that could result in budget cuts which Defense Secretary Leon Panetta said Thursday could "hollow out the defense force of this nation."

"This fiscal uncertainty has become a serious threat to our national security," he said.

In avoiding the so-called fiscal cliff last week, Congress delayed automatic across-the-board budget cuts throughout government, but will face the issue again before those automatic cuts take place at the end of next month. It promises to be a contentious congressional debate.

The nation is about to bump up against its legal spending authority, the debt ceiling, next month and, again, a congressional fight over raising it is certain. No resolution raises the prospect of a government shutdown.

In addition, congress funded government agencies for only six months when the fiscal year began in October, meaning funding runs out in the final week of March, raising the prospect of a government shutdown if there is no agreement on how to fund government after that point.

"The fact is looking at all three of those, we have no idea what the hell is going to happen," Panetta said.

The Washington area economy could be hit hard, with defense contractors watching all three coming debates carefully.

"We planned to have things be a little slow through the continuing resolution through March. What we really didn't plan for was the fact that there might be a major disruption due to the debt ceiling conversation so, if there's a government shutdown in March, April because they can not come to an agreement, that would be something we haven't planned for," said the co-founder of Immixgroup here, Steve Charles.

Could people lose their jobs?

"Absolutely. Certain contractors have contracts that expire in this February, March, April time frame and the government will not be in a position to award new contracts with all of this fiscal uncertainty so those kinds of companies would really be in a tough shape," Charles told 9News Now.

At Niitek in Sterling, Virginia, the company has delayed product development and essentially instituted a hiring freeze while it waits for the uncertainty to be resolved. Niitek manufactures and designs, among other products, ground penetrating radar that can detect hidden explosives which target American troops. The technology helps troops avoid the dangers and, because of the critical nature of the devices, funding seems secure for the products being used in the war in Afghanistan.

Development of new products and technologies and the hiring that com,es with that development, however, remains on hold, pending congressional resolution of the coming budget fights.